Major Japanese Banks And BlackRock Join Progmat Initiative To Digitise JGB Repo Market With Instant Settlement Model

Japanese fintech firm Progmat has launched a working group to explore putting Japanese government bonds (JGBs) — the country’s most important financial instrument — onto a public blockchain. The initiative, announced today, brings together over 40 organisations including BlackRock Japan, major domestic banks such as MUFG and Mizuho, top securities firms, and four of Japan’s leading law firms.

The core idea is straightforward: today, when institutions lend and borrow using government bonds as collateral (called a “repo” transaction), settlement takes a full business day. By converting JGBs into digital tokens and using stablecoins as the cash side of the trade, both legs of the deal could settle instantly — on the same day, or even within hours. This opens up the possibility of so-called “intraday alpha,” allowing banks and funds to put their capital to work and get it back before markets close.

“Position open and close can be executed on T+0” — compared to the current T+1 standard, that is a meaningful shift for institutional treasury management.

The move follows fast progress elsewhere. In August 2025, a consortium of major financial institutions completed an on-chain repo transaction using US Treasuries and the stablecoin USDC. In December, America’s main clearinghouse (DTCC) announced plans to tokenise US Treasury securities held in custody. As of today, around $339 billion in on-chain repo is already in execution globally — a figure that underscores how quickly this space is moving.

Japan accounts for roughly 10% of the global repo market, but has lagged in tokenising its government debt. The challenge is partly structural: Japan already has robust settlement infrastructure, so the cost-benefit case for a parallel digital system needs to be compelling. The study will examine legal, tax, and technical hurdles across several potential tokenisation models before recommending a path forward.

The working group kicks off this month, with a formal report due in October 2026. If the findings are positive, Progmat aims to launch real commercial issuance projects before the end of the year.

Progmat Advances Infrastructure Strategy With Migration To Avalanche 

Today’s announcement is consistent with a broader infrastructure push already underway at Progmat. In February this year, the company revealed it would migrate its entire platform — Japan’s largest security token infrastructure, with over ¥439 billion in assets under management — from the private Corda network to a dedicated Avalanche Layer 1 blockchain. The move will transfer more than $2 billion in tokenized real estate and corporate bonds onto public blockchain rails, with the migration scheduled for completion by the end of June 2026.

The shift to Avalanche brings sub-second transaction finality, compatibility with the global Ethereum developer ecosystem (EVM), and an application-specific network that can be tailored to Japan’s regulatory requirements. Progmat currently accounts for around 63% of all security token issuance in Japan — meaning this infrastructure choice effectively sets the technical standard for the country’s digital securities market, which is expected to surpass ¥1 trillion ($7 billion) by end of 2026.

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